Week Ahead: Pence vs Harris in focus after messy presidential debate

Week Ahead

Vice president Mike Pence and senator Kamala Harris will both be hoping to emerge from this week’s vice presidential debate with more dignity than the presidential candidates did last week. It shouldn’t be hard. Also ahead, there’s plenty from central banks this week, including a rate decision from the RBA and minutes from the latest FOMC and ECB meetings.

US election: More decorum from Pence and Harris in vice presidential debate?

This week sees the second of the US election debates, this time the one and only face-off between vice president Mike Pence and senator Kamala Harris. 

The first presidential debate last week seems to have little impact on the polls, and is viewed as being such an embarrassment that the Commission on Presidential Debates has announced it will make changes to the format of future events in an attempt to make things more orderly. 

One of the changes being considered is to cut candidate’s microphones if they try to interrupt excessively. Although this will impact Trump more than Biden, this might not necessarily disadvantage the President, who didn’t give his opponent much opportunity to slip up last time.

The vice presidential debate gets going at 21.00 ET, October 7th (01.00 UTC, October 8th). The last time Pence appeared in a nationally televised debate was in October 2016. Harris, on the other hand, has had plenty of practice in recent months. 

FOMC and ECB meeting minutes

Sandwiching the vice-presidential debate this week are the Federal Open Market Committee minutes and the European Central Bank accounts. 

The FOMC took the opportunity last month to flesh out its new average inflation targeting strategy, although according to its predictions it’ll be a long time before policymakers are in a position to let inflation run hot. The latest minutes might provide some more clarity, but with the debate following a couple of hours later, markets might not take much notice. 

ECB president Christine Lagarde noted after the latest meeting of the Governing Council that the EURUSD exchange rate had risen notably, although she also stated that “as you know, we don’t target the exchange rate”. The minutes could give more information on how policymakers fear a strong euro might impact their mandate. 

Although EURUSD has retreated after peaking above 1.20 at the start of September, the pairing is trending around the same levels as were seen when the ECB were considering its strength. 

Reserve Bank of Australia interest rate decision

Futures markets are firmly betting that the Reserve Bank of Australia will cut rates to 0% when it meets this week. ASX 30 Day Interbank Cash Rate Futures show a 64% chance of a cut at the time of writing. 

This comes after recent comments from deputy governor Guy Debelle, who used a speech to outline policy tools the RBA is considering to help it meet its twin mandates on employment and inflation. 

Foreign exchange intervention and negative interest rates were both on the list. 

Economic data to watch

In terms of economic data, we’ll be watching the US ISM nonmanufacturing PMI and weekly jobless claims, German industrial production and a slew of data from the UK on Friday, including monthly GDP, industrial production and construction output figures.

Highlights on XRay this Week 

Read the full schedule of financial market analysis and training.

17.00 UTC 05-Oct Blonde Markets
From 15.30 UTC 06-Oct Weekly Gold, Silver, and Oil Forecasts
17.00 UTC 07-Oct Webinar: 10 Trading Rules for Every Level of Trader
17.00 UTC 08-Oct Election2020 Weekly
12.00 UTC 09⁠-⁠Oct Platform Walkthrough

Key Events this Week

Watch out for the biggest events on the economic calendar this week. A full economic and corporate events calendar is available in the platform.

07.15 – 08.30 UTC 05-Oct Finalised Eurozone, UK Services PMIs
14.00 UTC 05-Oct US ISM Nonmanufacturing PMI
03.30 UTC 06-Oct RBA Interest Rate Decision
Pre-Market 06-Oct Paychex – Q1 2021
After-Market 06-Oct Levi’s – Q3 2020
06.00 UTC 07-Oct German Industrial Production
07-Oct Tesco – Interim Announcement 20/21
14.30 UTC 07-Oct US EIA Crude Oil Inventories
18.00 UTC 07-Oct FOMC Meeting Minutes
01.00 UTC 08-Oct US Vice President Nominee Debate
11.30 UTC 08-Oct ECB Monetary Policy Meeting Accounts
12.30 UTC 08-Oct US Weekly Jobless Claims
14.30 UTC 08-Oct US EIA Natural Gas Storage
06.00 UTC 09-Oct UK Monthly GDP, Production, Output